The terms of employment of the majority of employees currently working in Qatar are governed by Law No.14 of 2004 (Labour Law) except those individuals and entities which are expressly excluded, including the employees of the Qatar Government and Qatar Petroleum amongst others. These employees are often subject to employment laws and regulations which are materially different than those set out in the Labour Law, e.g. they receive additional allowances, longer holidays and may be subject to different termination provisions.
Whilst the excluded employees are aware of which regulations govern their employment there would appear to be a general misconception in Qatar as to how the Labour Law exclusions are applied, i.e. to which entities and employees, which often leads to questions being raised as to why one employee working for one entity receives one benefit when another working for another entity does not.
This article will now try to address some of the questions which are often raised in relation to the employment provisions of the Qatar Financial Centre (QFC) in the context of those of the Labour Law. The QFC is an exempt entity with its own unique employment regulatory regime.
The QFC employment provisions are set out in the QFC Employment Regulations No.10 of 2006 (QFC Employment Regulations) and apply to the employees of the Qatar Financial Centre Authority and the employees of its licensed entities and institutions in addition to the employees of the Qatar Financial Centre Regulatory Authority, the Civil and Commercial Court and the Regulatory Tribunal. This article initially considers the key differences and then provides further details in relation to additional matters of interest.
Minimum requirements of an employment contract
Labour Law: a written employment contract, attested by the Labour Department of the Ministry of Labour and Social Affairs should be executed for each employee. The employment contract must comprise of three copies with one copy delivered to each of the parties and the third copy to be deposited with the Labour Department.
The employment contract must specify terms including, the name of the employer and place of work, details regarding the employee (name, nationality, profession, residence and proof of identification), the nature and type of the work, the employee's start date, the period of the contract and the agreed salary information. Notwithstanding the requirement for an employment contract, the Labour Law states that where an employment contract does not exist an employee can evidence his employment term by whatever means, e.g. payslips.
QFC Employment Regulations: an employment contract under the QFC Employment Regulations should contain a broader scope of terms including, the name of the employer and employee, the date of commencement of employment, the employee's salary or method of calculation of salary, job title, whether the employment is for a specified or unlimited duration, the place of work, terms and conditions relating to hours of work, annual leave and sick leave, reference to disciplinary rules and/or grievance procedures. An employment contract is not subject to the approval of the QFC or any associated body.
Practical issues on termination
Labour Law: an employer is under no obligation to issue an employee with a no objection certificate ("NOC") in the State. If an employer refuses to issue an employee with a NOC, the employer is obliged to repatriate the employee to his/her country of domicile with 14 days of termination.
QFC Employment Regulations: the QFC Employment Code issued in February 2010, also applicable to all QFC employees, includes the obligation for the employers to permit their employees, whether sponsored or not, to transfer to another employer in the State, whether in the QFC or not. This includes providing the employees with all documentation required under State or QFC requirements, including all NOC letters and consents. There is no corresponding obligation in the QFC to repatriate an employee. If the employee decides to leave Qatar, he/she will be responsible for their own repatriation.
End of service benefit
Labour Law: subject to the completion of one year's continuous service with the employer, each employee is entitled upon termination, to an end of service gratuity payment which is calculated on the basis of an employee's final basic wage. The method of calculation is three weeks of the employee's final basic wage for every completed year of service. Fractions of service, i.e. parts of years, are to be paid to the employee pro-rata.
QFC Employment Regulations: there is no corresponding obligation in the QFC to provide any form of end of service gratuity, the provision of any such payment would be a contractual arrangement between the parties.
Payment of salary
Labour Law: all salary payments for employees must be processed through the Wages Protection System (WPS). The effect of WPS is that all salary payments must now be transferred electronically directly from an employer's local Qatari bank account into a Qatari account in the name of the employee. The salary payment must be made in Qatari Riyals.
QFC Employment Regulations: there is no corresponding obligation to comply with WPS in the QFC. Salary and other payments due to the employee should be paid in the currency stated in the employment contract or any currency agreed between the employer and employee.
Labour Law: an employer can subject the employee to a single probation period of not more than six months. During this period, the employer may terminate the employment contract if it is determined that the employee is incapable of carrying out the work by giving three days' written notice.
QFC Employment Regulations: again a single probation period of not more than six months is permitted. An employee shall not be subjected to more than one probation period by the same employer except for cause; there is no definition of cause within the QFC Employment Regulations. During the probation period, if the employee is not capable of carrying out the work, the employer can terminate the employment contract by giving two weeks' written notice.
Both the Labour Law and the QFC Employment Regulations remain silent on the ability of an employee to terminate the employment contract during the probationary period; such a right would be contractual.
Both the Labour Law and the QFC Employment Regulations permit the inclusion of restrictive covenants in the employment contract. In order for the restrictions to be valid, they must be reasonable, must not constitute an unreasonable restraint of trade and must be appropriate to the circumstances of the employee's employment with the employer. In any event, under the Labour Law, the period of restriction cannot be longer than two years.
Termination of employment – with notice
Labour Law: if the term of the employment contract is unlimited, each party may terminate it, once probation has been successfully completed, without giving reasons. The notice period shall be not less than one month if the period of service is five years or less. If the period of service exceeds five years, the period of service shall be two months.
QFC Employment Regulations: employment may be terminated by each party for any lawful reason at any time. The notice periods shall be one month if the period of service is less than five years and three months if the length of service is more than five years. Interestingly, the QFC Employment Regulations permit the parties to waive the right to notice.
Termination of employment - without notice
Labour Law: prescribes a list of ten instances for which an employer may dismiss an employee for gross misconduct without notice and without the payment of end of service gratuity.
QFC Employment Regulations: prescribes a list of 11 instances under which an employer may terminate an employee's contract of employment without notice.
In both instances, given termination is without notice, it is important for the employer to be certain that the employee's actions fall within one of those instances.
Labour Law: provides for a maximum working week of 48 hours, eight hours a day, with Friday being the weekly day of rest. In Ramadan, this is reduced to a maximum of six hours per day and is applicable to both fasting and non-fasting employees. The Labour Law also details how overtime should be paid.
QFC Employment Regulations: also provide for a maximum working week of 48 hours. In Ramadan, an employee who is observing the fast shall not be required to work in excess of six hours per day. There is no provision for the calculation of overtime in the QFC Employment Regulations.
Labour Law: an employee is entitled to a period of 12 weeks of sick leave for every year of service. The sick leave shall not be granted until the completion of at least three months service and is subject also to the production of a medical certificate from a physician approved by the employer. The employee should receive full pay for the first two weeks of the sickness absence; half pay for the next four weeks with the final six weeks being unpaid. An employer is entitled to terminate an employee after the twelfth week of sickness absence if it has been proved by a report issued by a competent physician that the employee is unable to resume work.
QFC Employment Regulations: the maximum annual sick leave entitlement without a medical opinion certifying an appropriate medical condition is 30 days and up to 90 days with such certified medical opinion. If an employee takes an aggregate of 90 days in any 12 month period, the employer may terminate the employee immediately with written notice.
Labour Law: a female employee who has been employed by an employer for a complete year shall be entitled to maternity leave with full pay for a period of 50 days. Such maternity leave shall include the period before and after the delivery provided that the period following the delivery shall not be less than 35 days.
QFC Employment Regulations: a female employee who has been employed for a complete year preceding the eighth week before the expected week of childbirth is entitled to be paid maternity leave for a period of three months. Such paid maternity leave shall include the period before and after the delivery.
Note: Qatari laws (saved for those issued by the Qatar Financial Centre to regulate internal business) are issued in Arabic and there are no official translations, therefore for the purposes of drafting this article we have used our own translations and interpreted the same in the context of Qatari regulations and current market practice.